Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
Investors’ mood was mixed yesterday as they grappled with a raft of data. In the US, Treasury yields fell again despite the Fed's hawkish tone on Wednesday, weighed down by concerns about some regional US banks and higher than expected jobless claims, although Q4 productivity and labour cost data were encouraging for disinflationary momentum.
The FOMC kept US interest rates on hold, saying it needed more confidence that inflation was moving toward 2% on a sustainable basis before cutting rates. Powell later stated that the FOMC was unlikely to have such confidence by March.
Tuesday was a mixed bag for financial markets, with macro data and earnings releases on the agenda ahead of today’s highly anticipated FOMC meeting.
Investors started the week in a mildly risk-on mood, with sovereign bond yields falling across the board. In the Eurozone, ECB officials speaking on Monday seemed confident about a future rate cut, although they remained inconclusive on the exact timing of it. US yields were weighed down by the Treasury's lower than expected Q1 borrowing forecast.
In the final session of the week, market sentiment was mixed on both sides of the Atlantic. In Europe, government bond yields remained fairly flat following Thursday’s ECB meeting, after which investors see a first rate cut in April as more plausible. Major European stock market indices rallied on this expectation, posting a week of strong gains.
The ECB governing council left interest rates unchanged and Lagarde remarked how core inflation is on a downward path and wage growth has stabilized. These remarks pushed investors to assign a 90% probability of an interest rate cut in the ECB’s next meeting in April, and pushed down sovereign bond yields.
In yesterday’s session, global stock markets advanced as investors increased risk appetite following reports about a Chinese stimulus to support the local stock market, a better-than-expected earnings season in the U.S. so far, and a favorable US PMI reading. Sovereign bond yields edged lower in the euro area and slightly rose in the U.S.
Investors traded cautiously in yesterday’s session as they await the ECB’s decision and US macro data in the coming days. Sovereign bond yields edged higher across the board, while stock markets were mixed, falling in the euro area and modestly rising in the US. Chinese stocks rallied on reports of a government stimulus to stabilize stock markets.
Stock markets edged higher and sovereign bond yields fell modestly in the US and the euro area as investors slightly increased their risk apetite ahead central bank decisions from the ECB and the BOJ, US 4Q GDP and PCE deflator later this week, as well as further earings reports in the US market.
Global financial markets were mixed in the last session of the week as investors continue to navigate through interest rate cut expectations and new economic data. US University of Michigan consumer sentiment index improved to 78.8, the highest reading since July 2021, boosting the stock market and bringing the S&P 500 to a new record high.